Editor’s note: This column was included in the May 23 version of The Pulse, a weekly BankBeat newsletter sent to subscribers.
The announcement by Martin Gruenberg that he will step down as chair of the FDIC is welcome news in light of the Cleary Gottlieb Steen & Hamilton report that was made public on May 7, but the move fails to lift the stink of politics that continues to foul the air around the regulatory agency charged with care of the bank insurance fund.
Until this week, a group of key Democrats had circled the wagons to protect Gruenberg. Press reports inform us that President Biden, Sen. Elizabeth Warren (Mass.), and FDIC board members Rohit Chopra of the CFPB and Michael Hsu of the OCC were rallying around Gruenberg, who at the time would not acknowledge that he should leave. But Monday, Ohio Sen. Sherrod Brown, a Democrat who had defended Gruenberg, changed his mind and called on Gruenberg to resign. Apparently the two congressional hearings where Gruenberg testified last week made more of an impact on Brown than they did on the FDIC Chair.
Gruenberg’s announcement came later on Monday, but he didn’t step down immediately, saying he’d stay on until a successor is named — and confirmed! Should Gruenberg get to decide when he leaves? I don’t think so. Gruenberg’s departure is not just a courtesy; it’s a matter of justice. Ask the 500 FDIC employees who phoned in comments during the investigation.
Nevertheless, here we are. Gruenberg is concerned the Democratic progressive agenda will be upended by any temporary leadership at the FDIC that is not ordained by the White House. Too bad for any FDIC employees working for managers who might be harassing or belittling them; I guess they will just have to wait.
We can only hope for two things: First, let’s hope the Dems move quickly, and I mean let’s get this done soon. Poking along until after Independence Day is the equivalent of doing nothing in response to the FDIC’s culture problems. Second, the next FDIC chair should be someone who will address the culture problems as their top priority. FDIC employees, most of whom are professional, knowledgeable and respectful, deserve a chair who cares about them. The rank and file should be empowered to carry out the charter of this venerable agency without the impediments of a hostile environment. Policy alone, whether shaped by Democrats or Republicans, isn’t worth much if the people charged with implementing it can’t work together.
